[Federal Register Volume 68, Number 130 (Tuesday, July 8, 2003)]
[Notices]
[Pages 40623-40626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17223]



[[Page 40623]]

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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service


National School Lunch, Special Milk, and School Breakfast 
Programs; National Average Payments/Maximum Reimbursement Rates

AGENCY: Food and Nutrition Service, USDA.

ACTION: Notice.

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SUMMARY: This notice announces the annual adjustments to: (1) The 
``national average payments,'' the amount of money the Federal 
government provides States for lunches, afterschool snacks and 
breakfasts served to children participating in the National School 
Lunch and School Breakfast Programs; (2) the ``maximum reimbursement 
rates,'' the maximum per lunch rate from Federal funds that a State can 
provide a school food authority for lunches served to children 
participating in the National School Lunch Program; and (3) the rate of 
reimbursement for a half-pint of milk served to nonneedy children in a 
school or institution which participates in the Special Milk Program 
for Children. The payments and rates are prescribed on an annual basis 
each July. The annual payments and rates adjustments for the National 
School Lunch and School Breakfast Programs reflect changes in the Food 
Away From Home series of the Consumer Price Index for All Urban 
Consumers. The annual rate adjustment for the Special Milk Program 
reflects changes in the Producer Price Index for Fluid Milk Products. 
These payments and rates are in effect from July 1, 2003, through June 
30, 2004.

EFFECTIVE DATE: July 1, 2003.

FOR FURTHER INFORMATION CONTACT: Ms. Rosemary O'Connell, Section Chief, 
School Programs Section, Policy and Program Development Branch, Child 
Nutrition Division, Food and Nutrition Service, USDA, 3101 Park Center 
Drive, Room 640, Alexandria, VA 22302 or phone (703) 305-2619.

SUPPLEMENTARY INFORMATION:

Background

    Special Milk Program for Children--Pursuant to section 3 of the 
Child Nutrition Act of 1966 (CNA) (42 U.S.C. 1772), the Department 
announces the rate of reimbursement for a half-pint of milk served to 
nonneedy children in a school or institution that participates in the 
Special Milk Program for Children. This rate is adjusted annually to 
reflect changes in the Producer Price Index for Fluid Milk Products, 
published by the Bureau of Labor Statistics of the Department of Labor.
    For the period July 1, 2003, through June 30, 2004, the rate of 
reimbursement for a half-pint of milk served to a nonneedy child in a 
school or institution which participates in the Special Milk Program is 
13.00 cents. This reflects a decrease of 2.65 percent in the Producer 
Price Index for Fluid Milk Products from May 2002 to May 2003 (from a 
level of 147.1 in May 2002 to 143.2 in May 2003).
    As a reminder, schools or institutions with pricing programs that 
elect to serve milk free to eligible children continue to receive the 
average cost of a half-pint of milk (the total cost of all milk 
purchased during the claim period divided by the total number of 
purchased half-pints) for each half-pint served to an eligible child.
    National School Lunch and School Breakfast Programs--Pursuant to 
sections 11 and 17A of the Richard B. Russell National School Lunch Act 
(NSLA) (42 U.S.C. 1759a and 1766a), and section 4 of the CNA (42 U.S.C. 
1773), the Department annually announces the adjustments to the 
National Average Payment Factors and to the maximum Federal 
reimbursement rates for lunches and afterschool snacks served to 
children participating in the National School Lunch Program and 
breakfasts served to children participating in the School Breakfast 
Program. Adjustments are prescribed each July 1, based on changes in 
the Food Away From Home series of the Consumer Price Index for All 
Urban Consumers, published by the Bureau of Labor Statistics of the 
Department of Labor. The changes in the national average payment rates 
for schools and residential child care institutions for the period July 
1, 2003, through June 30, 2004, reflect a 2.19 percent increase in the 
Consumer Price Index for All Urban Consumers during the 12-month period 
May 2002 to May 2003 (from a level of 177.6 in May 2002 to 181.5 in May 
2003). Adjustments to the national average payment rates for all 
lunches served under the National School Lunch Program, breakfasts 
served under the School Breakfast Program, and afterschool snacks 
served under the National School Lunch Program are rounded down to the 
nearest whole cent.
    Lunch Payment Levels--Section 4 of the NSLA (42 U.S.C. 1753) 
provides general cash for food assistance payments to States to assist 
schools in purchasing food. The NSLA provides two different section 4 
payment levels for lunches served under the National School Lunch 
Program. The lower payment level applies to lunches served by school 
food authorities in which less than 60 percent of the lunches served in 
the school lunch program during the second preceding school year were 
served free or at a reduced price. The higher payment level applies to 
lunches served by school food authorities in which 60 percent or more 
of the lunches served during the second preceding school year were 
served free or at a reduced price.
    To supplement these section 4 payments, section 11 of the NSLA (42 
U.S.C. 1759(a)) provides special cash assistance payments to aid 
schools in providing free and reduced price lunches. The section 11 
National Average Payment Factor for each reduced price lunch served is 
set at 40 cents less than the factor for each free lunch.
    As authorized under section 8 (42 U.S.C. 1757) and section 11 of 
the NSLA, maximum reimbursement rates for each type of lunch are 
prescribed by the Department in this notice. These maximum rates are to 
ensure equitable disbursement of Federal funds to school food 
authorities.
    Afterschool Snack Payments in Afterschool Care Programs--Section 
17A of the NSLA (42 U.S.C. 1766a) establishes National Average Payments 
for free, reduced price and paid afterschool snacks as part of the 
National School Lunch Program.
    Breakfast Payment Factors--Section 4 of the CNA (42 U.S.C. 1773) 
establishes National Average Payment Factors for free, reduced price 
and paid breakfasts served under the School Breakfast Program and 
additional payments for free and reduced price breakfasts served in 
schools determined to be in ``severe need'' because they serve a high 
percentage of needy children.

Revised Payments

    The following specific section 4, section 11 and section 17A 
National Average Payment Factors and maximum reimbursement rates for 
lunch, the afterschool snack rates, and the breakfast rates are in 
effect from July 1, 2003, through June 30, 2004. Due to a higher cost 
of living, the average payments and maximum reimbursements for Alaska 
and Hawaii are higher than those for all other States. The District of 
Columbia, Virgin Islands, Puerto Rico and Guam use the figures 
specified for the contiguous States.

National School Lunch Program Payments

    Section 4 National Average Payment Factors--In school food 
authorities which served less than 60 percent free

[[Page 40624]]

and reduced price lunches in School Year 2001-02, the payments for 
meals served are: Contiguous States--paid rate--21 cents, free and 
reduced price rate--21 cents, maximum rate--29 cents; Alaska--paid 
rate--34 cents, free and reduced price rate--34 cents, maximum rate--45 
cents; Hawaii--paid rate--24 cents, free and reduced price rate--24 
cents, maximum rate--33 cents.
    In school food authorities which served 60 percent or more free and 
reduced price lunches in School Year 2001-02, payments are: Contiguous 
States--paid rate--23 cents, free and reduced price rate--23 cents, 
maximum rate--29 cents; Alaska--paid rate--36 cents, free and reduced 
price rate--36 cents, maximum rate--45 cents; Hawaii--paid rate--26 
cents, free and reduced price rate--26 cents, maximum rate--33 cents.
    Section 11 National Average Payment Factors--Contiguous States--
free lunch--198 cents, reduced price lunch--158 cents; Alaska--free 
lunch--321 cents, reduced price lunch--281 cents; Hawaii--free lunch--
231 cents, reduced price lunch--191 cents.
    Afterschool Snacks in Afterschool Care Programs--The payments are: 
Contiguous States--free snack--60 cents, reduced price snack--30 cents, 
paid snack--5 cents; Alaska--free snack--97 cents, reduced price 
snack--48 cents, paid snack--8 cents; Hawaii--free snack--70 cents, 
reduced price snack--35 cents, paid snack--6 cents.

School Breakfast Program Payments

    For schools ``not in severe need'' the payments are: Contiguous 
States--free breakfast--120 cents, reduced price breakfast--90 cents, 
paid breakfast--22 cents; Alaska--free breakfast--191 cents, reduced 
price breakfast--161 cents, paid breakfast--32 cents; Hawaii--free 
breakfast--139 cents, reduced price breakfast--109 cents, paid 
breakfast--25 cents.
    For schools in ``severe need'' the payments are: Contiguous 
States--free breakfast--143 cents, reduced price breakfast--113 cents, 
paid breakfast--22 cents; Alaska--free breakfast--228 cents, reduced 
price breakfast--198 cents, paid breakfast--32 cents; Hawaii--free 
breakfast--166 cents, reduced price breakfast--136 cents, paid 
breakfast--25 cents.

Payment Chart

    The following chart illustrates: the lunch National Average Payment 
Factors with the sections 4 and 11 already combined to indicate the per 
lunch amount; the maximum lunch reimbursement rates; the reimbursement 
rates for afterschool snacks served in afterschool care programs; the 
breakfast National Average Payment Factors including ``severe need'' 
schools; and the milk reimbursement rate. All amounts are expressed in 
dollars or fractions thereof. The payment factors and reimbursement 
rates used for the District of Columbia, Virgin Islands, Puerto Rico 
and Guam are those specified for the contiguous States.

BILLING CODE 3410-30-P

[[Page 40625]]

[GRAPHIC] [TIFF OMITTED] TN08JY03.016

    This action is not a rule as defined by the Regulatory Flexibility 
Act (5 U.S.C. 601-612) and thus is exempt from the provisions of that 
Act.
    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507), no new recordkeeping or reporting requirements have been 
included that are subject to approval from the Office of Management and 
Budget.
    This action is exempted from review by the Office of Management and 
Budget under Executive Order 12866.
    National School Lunch, School Breakfast and Special Milk Programs 
are listed in the Catalog of Federal Domestic Assistance under No. 
10.555, No. 10.553 and No. 10.556, respectively, and are subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. (See 7 CFR part 3015, 
subpart V, and the final rule

[[Page 40626]]

related notice published at 48 FR 29114, June 24, 1983.)

    Authority: Sections 4, 8, 11 and 17A of the National School 
Lunch Act, as amended, (42 U.S.C. 1753, 1757, 1759a, 1766a) and 
sections 3 and 4(b) of the Child Nutrition Act, as amended, (42 
U.S.C. 1772 and 42 U.S.C. 1773(b)).

    Dated: July 2, 2003.
Roberto Salazar,
Administrator, Food and Nutrition Service.
[FR Doc. 03-17223 Filed 7-7-03; 8:45 am]
BILLING CODE 3410-30-C